Condo-Townhome Ownership Bill Becomes Law

A healthy housing market includes a wide variety of options to meet the needs present in the market. Condos and townhomes represent a key segment of the marketplace but, is facing serious challenges.

A key challenge to a healthy condo/townhome market is the state’s current construction defects law, which has created a disincentive to new condo/townhome development.

HF1538, which passed the legislature with broad bi-partisan support and was signed into law by Governor Dayton will remove current barriers to developing owner-occupied condos/townhomes.

The Law Does the Following:

Requires that a Homeowner Association mail each member of the association the nature of construction defect claim, the relief sought, and the HOA proposal to fund the litigation.

Requires the Homeowner Association to receive a majority approval from association members to proceed with a construction defect claim.

Prior to any construction defect claim, both parties must agree to mediation.

The association’s board of directors shall prepare and approve a written preventative maintenance plan, maintenance schedule, and maintenance budget for the common elements. The association shall follow the approved preventative maintenance plan.

Expands the definition of a construction defect claim to “a civil action or an arbitration proceeding based on any legal theory including, but not limited to, …the loss of use of, real or personal property caused by a defect in the initial design or construction of an improvement to real property that is part of a common interest community, including an improvement that is constructed on additional real estate.”